Samsung’s de-facto chief, Jay Y. Lee, has been sentenced to a five-year jail term after a court in South Korea found him guilty of embezzlement, perjury and bribery to get government favors for the Korean electronics giant. On Friday, local news agency Yonhap stated that the court ruled that Samsung’s vice chairman bribed former South Korea President Park Geun-hye.
Samsung heir convicted of bribery
At the Seoul Central District Court, Lee, the 49-year-old scion of the family behind Samsung, was seen handcuffed and wearing a white rope around his dark-colored jacket. There was also an envelope in his hand, according to The Hindu.
As the verdict was nearing, there were about 800 riot police surrounding the court to prevent any potential conflict. The importance of the case is evident from the fact that there were hundreds of applications for the 30 seats in the courtroom open to members of the general public, which were assigned by lottery.
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Other than Lee, four other Samsung executives were accused of being involved in bribing Park and Choi Soon-sil, her confidant and close friend. According to prosecutors, the Samsung heir and other company executives gave 43.3 billion won (about $28 million) in bribes to organizations controlled by Choi in return for favors.
The Samsung executives have not been found to be directly asking for Ms. Park’s support, but the court stated that they made payments to a secret confidant of the former president. Reuters reported that Lee will definitely appeal the decision, and one of Lee’s lawyers stated that they are quite confident that the decision will be in favor of the Samsung heir.
What’s next for Samsung?
Samsung has dissolved its strategy office, which was responsible for making important decisions. Among other top executives, Vice Chairman Choi Gee-Sung and President Chang Choong Ki also stepped down from their positions.
Samsung, one of the companies credited with helping rebuild war-torn South Korea, is now assumed to be neck-deep in corruption. Samsung’s biggest task now will be to manage its vast business, which accounts for about one-fifth of South Korea’s exports, without the “crown prince of the Lee family at the helm,” notes The New York Times.
Samsung said Lee has been providing long-term strategic vision and helped to build an alliance with key partners, such as Apple and Google. Experts previously told CNBC that whatever verdict comes down on the Samsung heir, it will not affect the day-to-day business at Samsung. Experts believe that Lee is not a global face of the brand, and that is why the verdict will not affect the business much.
Even though Lee has been found guilty, this does not impair his chance of succeeding his father. Previously, elder Lee was accused of tax evasion and bribery, but he was pardoned twice, notes The Verge. For executives filling top positions at South Korean conglomerates (known as chaebols) this is not new. Previously, the heads of Hyundai, SK and Hanwha were also pardoned in similar cases.